The "super limited partners" are being unshackled.

In recent years, there have been significant changes in the policies of government-guided funds in many parts of the country.

As one of the most active types of funds currently, government-guided funds used to be a pain point for GPs during fundraising due to requirements such as decision-making processes, investment return ratios, and local registration restrictions.

In the past two years, the industry trend has been undergoing positive changes. Many local government-guided funds have started to explore market-oriented reforms.

The Super LPs are Being Unshackled

Recently, there has been a warming trend in the primary market.

According to the statistics of FOFWEEKLY, in June, the investment activity of institutional LPs rebounded. Since the beginning of this year, the overall venture capital market has shown a fluctuating upward trend, and the primary market is gradually recovering. The continuously improving market environment has stimulated investment enthusiasm. In terms of data, the number of investments by institutional LPs has rebounded, with a month-on-month increase of 8.15% and a year-on-year increase of 41.12%.

In terms of the investment proportions of various types of LPs, policy-based LPs are still the most active. According to the distribution of institutional LP types in June, policy-based LPs had the highest investment proportion, accounting for 39.05%.

It is worth noting that since the beginning of this year, government-guided funds have shown a clearer and more positive optimization trend in terms of investment proportions, investment return requirements, and fault-tolerant mechanisms, and are generally being unshackled.

The ceiling of investment proportions has been continuously broken. The Anhui Provincial Department of Science and Technology issued the "Guidelines for the High-quality Operation of the Angel Mother Fund Group", allowing the mother fund to invest up to 70% in a single sub - fund, and canceling the upper limit for the joint investment of provincial, municipal, and county-level finances; On May 23, Jingzhou City issued the "Implementation Plan for Establishing a 2-billion-yuan Mother Fund to Accelerate the Construction of a Modern Industrial System", adding a 2-billion-yuan industrial guidance mother fund. The mother fund can invest up to 40% in sub - mother funds, up to 30% in industrial investment sub - funds, and up to 99% in talent innovation sub - funds and technological innovation sub - funds. Direct investment funds and special sub - funds will focus on supporting the cultivation of high - quality projects and high - tech enterprises in strategic emerging industries and future industries. The investment proportion of direct investment funds can reach up to 20% of the total equity of the invested enterprises, and the investment proportion of special sub - funds can reach up to 40% of the total equity of the invested enterprises.

Some institutions said: "In the past two years, the investment proportions of government-guided funds in many places have been continuously rising. In some regions, the multi - level joint investment can reach 60%, 70%, or even more than 90%, which will significantly relieve the fundraising pressure on GPs."

There has been a historic breakthrough in risk tolerance. At the policy level, the fault - tolerant mechanism has been significantly improved: Beijing, Tianjin, Guangxi and other places have clearly stated that they should avoid simply using the profit and loss of a single project or a single year as the evaluation basis; Sichuan, Shenzhen and other places have even proposed a 100% fault - tolerant mechanism.

An expert who has long observed state - owned venture capital pointed out: "When the state - owned capital's risk exposure reaches 100% and the boundaries of GP's exemption are clearly defined, it may activate the follow - up investment willingness of more social capital."

The duration of funds has also been significantly extended.

For example, the duration of many mother funds such as the Luoyang Angel Mother Fund, the Shanghai Future Industry Fund, the Jiangsu Yangzhou Aerospace Industry Special Mother Fund, the Jiangsu Yancheng Green and Low - Carbon Industry Special Mother Fund, the Fengxian Mother Fund, and the Guoxin Venture Capital Fund is clearly set at 15 years, or even up to 20 years.

For a long time, the domestic venture capital market has been calling for the influx of "long - term funds". There is a lack of LPs who can span the cycle, and in the past two years, "patient capital" has become the focus of the industry.

At the beginning of the year, the General Office of the State Council issued the "Guiding Opinions on Promoting the High - quality Development of Government Investment Funds", which once again mentioned "developing and expanding long - term capital and patient capital".

The Decision - Making of LPs is Greatly Accelerated

For a long time, the relatively complex decision - making processes, investment return ratio requirements, and local registration restrictions of government-guided funds have continuously posed challenges to GPs during the fundraising process.

In the past two years, the industry trend has changed significantly. On the one hand, many local government-guided funds are actively exploring market - oriented reform paths; on the other hand, both the national and local levels have continuously released policy signals to provide solid support for the development of the venture capital industry.

Recently, the National Development and Reform Commission, together with relevant parties, drafted the "Guidelines for the Layout Planning and Investment Direction of Government Investment Funds (Draft for Public Comment)" (hereinafter referred to as the "Guidelines") and the "Administrative Measures for Strengthening the Guidance, Evaluation, and Management of Government Investment Fund Investment Directions (Draft for Public Comment)" (hereinafter referred to as the "Administrative Measures") and solicited public comments. The public comment period is from July 30, 2025, to August 28, 2025.

The "Guidelines" point out that when establishing government investment funds, it is necessary to implement the requirements of building a unified national market, not for the purpose of investment promotion, and encourage reducing or canceling the investment return ratio.

Driven by the policy, more and more government-guided funds are reshaping the "long - term fund" ecosystem through institutional innovation. This not only injects confidence into GPs to invest boldly but also provides stronger capital support for the long - term development of technology - innovation enterprises.

Meanwhile, the investment decision - making of state - owned LPs in many places has also been significantly relaxed.

Taking Henan as an example, at the beginning of April, an angel mother fund in a certain place in Henan told us: "During the establishment of the mother fund, we have started to have extensive contacts with GPs. Although it is state - owned capital, the decision - making process is very efficient."

Another mother fund in a central province has established 3 sub - funds since the beginning of the year, and several others are under negotiation. A municipal mother fund was only announced to be established this month, and it has already started to have extensive contacts with GPs.

Recently, an LP close to us also said directly: "This year, we have an urgent need to invest and hope to contact more high - quality GPs."

On the other hand, many GPs said: "This year, we have received many signals from LPs urging us to make investments."

Driven by national policies and the adjustment of the venture capital ecosystem, state - owned LPs in many places are also moving towards a more market - oriented development model, which, at least to a certain extent, provides practical assistance to GPs.

Conclusion

Driven by both the national strategic orientation and the reshaping of the venture capital ecosystem, state - owned LPs in many places are accelerating their transformation towards a more market - oriented and professional operation model.

From the "bottom - up" investment with real money to the risk - sharing and process optimization at the institutional level, it is substantially injecting firm confidence into GPs to "dare to invest, be willing to invest, and be able to invest".

When the "patient capital attribute" of LPs is transformed into institutional guarantees and long - term commitments covering the entire cycle of fundraising, investment, management, and exit, the construction of this scarce "long - term fund ecosystem" lays a crucial foundation for future industries such as hard technology and artificial intelligence, which have long investment cycles and high technological barriers.

*This article only represents the personal views of the author.

This article is from the WeChat official account "FOFWEEKLY" and is published by 36Kr with authorization.